High Utilization on Some Cards and Mortgage

High Utilization on Some Cards and Mortgage

I am currently in the process of applying for a mortgage. We are getting our house built through Ryan Homes. I have about 3 cards that are considered "maxed out". I wanted to know if I pay these down to about 70-80% utilization, would I see a significant increase in score. I will also be paying off a installment loan with a $115 payment within the next 60 days. My mid score is currently a 634. I am attempting to get to 650-670 range by March. Any input is greatly appreciated.

Re: High Utilization on Some Cards and Mortgage

The installment loan might hurt you when you pay it off, cause if its been being paid for a long time, its helping your AAoA. I lost a few when we paid off a car loan that we had for 4+ years. If you can pull credit for approval prior to that showing closed I would do so.

Re: High Utilization on Some Cards and Mortgage

If that installment loan is your only one, paying it off can adversely impact your score (credit mix purposes). To get points quick, paying down your credit cards will do the trick. Although you'd probably need to pay them down closer to 50% in order to see a sizeable score bump.

Re: High Utilization on Some Cards and Mortgage

In this case, paying it off probably won't yield much of a score increase. I would go after those credit cards with everything I've got. I know it's probably tough as you're trying to save for the home as well, but getting your utilization down will give you a nice boost.

Re: High Utilization on Some Cards and Mortgage

jandj80 wrote:

The installment loan might hurt you when you pay it off, cause if its been being paid for a long time, its helping your AAoA. I lost a few when we paid off a car loan that we had for 4+ years. If you can pull credit for approval prior to that showing closed I would do so.

This is incorrect. A positive account will stay on your CRAs for at least 10 years after it is closed.

Re: High Utilization on Some Cards and Mortgage

getmycreditright wrote:

If that installment loan is your only one, paying it off can adversely impact your score (credit mix purposes). To get points quick, paying down your credit cards will do the trick. Although you'd probably need to pay them down closer to 50% in order to see a sizeable score bump.

This is also incorrect....having a pd/closed installment is the same as an open installment for credit mix purposes.

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.